Results of the January 2023 Survey on Consumer Expectations by the ECB

Eurozone

When we look back at December 2022:

The average amount people think prices have gone up over the last year fell from 9.9% in December 2022 to 9.5% in January 2023. People predict that prices will go up by 4.9% over the next year, down slightly from the previous month's prediction of 5%. Predictions for 3 years ahead went down too - from 3% to 2.5%. People's predictions for future price increases are still lower than what they believed happened in the past. It's not sure what's going to happen with prices in the next year, but people are still a little unsure. All income groups seem to feel the same way about prices. However, younger people aged 18-34 think prices have gone up less and will keep going up less, compared to older people aged 55-70. (Results about prices going up)

People were hopeful that their income would increase by 1.3% within the next year, which is an improvement from the 1.0% they expected in December. This change was primarily due to people with lower incomes. Their thoughts on how much they spent over the last year were about the same at 6.3%. However, they expected that they would spend less over the next year with an estimated growth rate of 3.8%, which is slightly lower than the previous month's prediction of 4.2%. This drop in spending expectations was mostly seen among people between the ages of 55 and 70. (Details regarding income and consumption)

The correlation between the job market and economic progress

Despite an expected contraction, there is optimism regarding economic growth in the coming year, with projections increasing from -1.5% to -1.2% as of December 2022. This positive outlook is reflected in a decrease in anticipated unemployment rates, which are forecasted to be 11.6% as opposed to 11.9% in December. However, it should be noted that consumers still perceive a higher unemployment rate than the current reported rate of 11.3%. Survey data from January 2023 indicates that unemployed respondents are slightly more optimistic about finding a job within the next three months, with a 28.1% probability compared to 27.9% in October 2022. Employed respondents' expectations of job loss have also improved, with a decrease from 9.2% in October to 8.1% in January. (Results related to the labor market and economic growth)

Accessing Housing and Credit Facilities

According to recent data, consumers anticipate a slight dip in the growth of their home value over the next year. The expected increase is projected to be around 2.5%, compared to the higher rate of 3.0% recorded in December 2022. However, predictions for mortgage interest rates have remained stable over the same period, with an anticipated rate of 4.9%, which is 1.6 percentage points higher than at the start of 2022. In terms of credit access, consumer perceptions of their chances of accessing credit over the past year remained consistent, while expectations for the next 12 months have slightly improved. Meanwhile, the percentage of consumers applying for credit has decreased slightly, from 13.9% in October 2022 to 13.6% in January.

The following edition of the Consumer Anticipations Survey findings is set to be published on April 4, 2023.

If you need to get in touch with the media, you can reach out to Eszter Miltényi-Torstensson at +49 69 1344 8034.

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